How The Coronavirus Impacts New York's Legal, Illicit Cannabis Operators

Both legal and illicit operators in New York’s  cannabis market have felt the impact of the coronavirus pandemic. 

The same could be said of virtually every other market, but New York is a unique case. 

New York’s Massive, Fragmented Cannabis Market 

The New York marijuana market carries immense potential.

The city, believed to have the highest global consumption rate per year, spent $38 million on medical cannabis in 2018, according to Arcview Market Research and BDS Analytics data. That figure could swell to $450 million by 2024, according to Arcview and BDS. 

If adult use laws were to pass, New York could generate $1.2 billion in spending by 2024, they said. 

New York has a vibrant illicit market, and had the pandemic not occurred, many politicians and industry insiders feel the state would have already passed adult use legislation. 

Some lawmakers continue to push on, despite Gov. Andrew Cuomo's reluctant pivot away from the issue for the second year in a row. The pressing concerns of the day have pushed marijuana reform, like other topics, mainly to the back burner.

Shifting Cannabis Markets

It’s unclear how much money the illicit side of the market generates. However, it would almost assuredly balloon sales figures in ways that would set New York apart from just about every other market in the world.

At the moment, operators on both sides of the industry are attempting to keep up with their changing markets.

Ryan G. Smith, co-founder and CEO of New York City-based ordering platform LeafLink, has used legal market data to predict that illicit market operators have experienced a similar impact to business from the pandemic. 

Noting that the legal sector experienced sporadic order patterns of larger quantities, Smith said the data "signals that people are stocking up" versus visiting local shops on a regular basis.

"Based on this, I would assume illicit markets are experiencing something similar," Smith told Benzinga. 

Operators are making moves to ensure safety for their clients, employees and business as a whole.

Melissa Vitale, a cannabis advocate and founder of MAVPR, said her retail clients are making efforts that include one-day-a-week delivery as well as encouraging bulk pricing and sales.

"This is a great time if you want to purchase a higher-end of cannabis," said Vitale, noting many operators' willingness to reduce premium prices to market cost when buying in bulk.

On the illicit side, in respect to social distancing, deliveries are being made in concealed bags in building lobbies or outside apartment doors.

One illicit operator who asked not to be named said they’ve shifted their whole operation.

"I treat [a sale] like I'm visiting a COVID victim," they said of new measures, which include no longer selling to a customer in the person's vehicle.

The operator also mentioned offering health perks, like free masks, gloves and hand sanitizer, for purchases of over $100.

Adam Goers, vice president of corporate affairs at Columbia Care, said temporary regulatory changes are helping both businesses and patients. 

Columbia Care Inc. CCHWF CCHW and the state's other operators made a "positive" transition as the orders took effect, he said.

"We have an obligation to make sure that both our employees as well as their patients are safe," Goers said, adding that the state has been working with operators to ensure that curbside delivery and other regulations emphasize safe social distancing.

Goers commended a New York rule change that allows deliveries to be made by one person rather than two. 

The Pandemic’s Impact On Cannabis Business

Despite the quarantine, both sides of the aisle appear to be operating as close to normal as could be expected.

Legal operators were unable to provide sales figures to Benzinga, but indicated that business has been good in recent weeks. 

Illicit sellers continue to operate as well. In some cases, supplies sell out in short order each day. Some report trying to balance making sales with the struggles customers have due to the coronavirus.

"I give a lot of people credit around this time,” said one operator. “I'm better than their landlord."

Related Links:

New York Aims To Adopt Adult Use Cannabis, Tout Regional Cooperation

Cannabis Legalization Could Get A Boost -- If We Get Through Coronavirus

Posted In: CannabisGovernmentNewsRegulationsMarketsInterviewAndrew CuomoMAVPRnew york


The Benzinga Cannabis Awards are coming back to the September 27-28, 2023 Cannabis Capital Conference to celebrate the NEWCREATIVE, INNOVATIVE, and OUTSTANDING companies of the cannabis industry.

  • Earn global recognition for your achievements.
  • Shine a spotlight on the people around you that deserve their moment.
  • Celebrate with the newest, hottest and most successful in the cannabis industry.

Nominate or apply NOW and help us celebrate the peoplesolutions, and companies leading the way in cannabis!

Join us on September 27-28, 2023 at Chicago Marriott Downtown Magnificent Mile in Chicago, IL.